Exam 2: Thinking Like an Economist

A) the impact of minimum-wage laws on employment in the fast food industry
B) the effect of changes in saving rates on GDP
C) the impact of monetary policy on the rate of inflation
D) the effect of tax policy on the rate of economic growth

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A) a bar graph
B) a pie chart
C) the coordinate system
D) a time-series graph

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A) They can only show variables that are positively related.
B) They are extremely difficult to understand.
C) They provide information for only a single variable.
D) They provide information on no more than two variables.

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A) a reduction in unemployment
B) an increase in the labour force
C) an improvement in technology
D) an increase in worker productivity

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A) the y-coordinate
B) the x-coordinate
C) either x or y, depending on the quadrant
D) not useful to know, since most graphs in economics use p and q, not x and y

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A) the first number of an ordered pair, which represents the point's horizontal location
B) the second number of an ordered pair, which represents the point's horizontal location
C) the first number of an ordered pair, which represents the point's vertical location
D) the second number of an ordered pair, which represents the point's vertical location

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A) a combination of two goods that an economy will never be able to produce
B) a combination of two goods that an economy can produce using all available resources and technology
C) a combination of two goods that an economy can produce using some of its resources and technology
D) a combination of two goods that an economy may be able to produce sometime in the future with additional resources and technology

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A) A scientist chooses the assumptions that best prove a desired result.
B) A scientist chooses the assumptions that best describe reality.
C) A scientist chooses the assumptions that would be most widely accepted.
D) A scientist chooses the assumptions that best capture the essential features of the problem.

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A) 8 bathtubs
B) 20 barrels
C) the difference between the 8 bathtubs you get and the 20 barrels you give up
D) the difference between the 20 barrels you get and the 8 bathtubs you give up

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A) arrow A
B) arrow B
C) arrow C
D) arrow D

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A) households and firms
B) the goods and services market and the factors of production market
C) the goods and services market and the financial market
D) households and government

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A) to analyze data on workers
B) to design tax policy
C) to enforce the country's antitrust laws
D) to advise the Prime Minister

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A) There are unused resources or inefficiencies in the economy.
B) The economy is operating with efficiency.
C) Moving to a point on its production possibilities frontier would be economic growth.
D) To produce more of one good, the economy would have to give up some of the other good.

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A) Economists have not yet convinced the general public that the policies are undesirable.
B) Economists are simply wrong about the economic impact of these policies.
C) Economists have different values than do most people.
D) Economists are usually of a different political party than are lawmakers.

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A) They often falsify results if the desired effect is not reached.
B) They may make different assumptions for the long run and the short run.
C) They attempt to consider only the direct effects and not the indirect effects.
D) They can immediately change policies if they are ineffective.

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A) factors of production
B) outputs
C) inputs
D) resources

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